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Informist, Wednesday, Dec. 18, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold were flat on the Multi Commodity Exchange of India and COMEX ahead of the US Federal Open Market Committee interest rate outcome early Thursday. The yellow metal traded in a narrow band as traders were cautious of taking aggressive bets and preferred to sit on cash.

"Gold continues to trade within a range as market participants await the Fed's policy announcement tonight, with increased focus on the 2025 outlook and concerns surrounding the job market. While a 25 basis point rate cut has largely been priced in, the accompanying statement and forward guidance will be the key drivers for market sentiment," Jateen Trivedi, vice president and research analyst at LKP Securities, said in a note. The policy statement is expected to set the tone for the next leg of movement in gold prices, Trivedi said.

At 1737 IST, the most-active February GOLD contract on the MCX was flat at INR 76,863 per 10 grams. The most-active February contract on COMEX was steady at $2,660.70 per ounce. The highest call open interest for gold was at the INR 78,000-INR 79,000 strike prices, suggesting a bullish view. The highest put open interest was at the INR 75,000-INR 74,000 strike for the Dec. 31 contract.

On Tuesday, gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 864.19 tonnes. The fund has a market value of $73.23 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 719.2 million, down from INR 1.14 billion on Tuesday.

SILVER marginally fell, taking cues from COMEX, as it traded below the 100-day simple and exponential moving average indicating weak sentiment. At 1752 IST, the most-active March contract of silver on the MCX was down 0.1% at INR 90,787 per kilogram. The same-month contract on COMEX was 0.1% lower at $30.90 per ounce.

On the options front, the highest call open interest was at the INR 100,000 strike price. The highest put open interest was at INR 90,000-INR 85,000 strike for the Feb. 24 expiry contract.

As of 1800 IST, the February and April gold contracts on the MCX recorded turnover of INR 16.76 billion and INR 751.79 million, respectively. The March and May silver contracts saw turnover of INR 59.89 billion and INR 288.42 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 87.05 on Wednesday, indicating that silver outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 87.17 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,500–77,220 per 10 gm

--COMEX gold seen at $2,647.80–$2,677.50 an ounce

--MCX silver seen at INR 90,200-91,350 per kg

--COMEX silver seen at $30.70-$31.20 an ounce

End

US$1 = INR 84.95

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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